23 Mar 2023
As part of the Spring Budget, the Chancellor announced that additional support with energy costs would be provided to heat network customers worth £380 million, or around £860 for the average heat network customer. Heat network customers are not protected by Ofgem’s price cap and have therefore faced energy bill increases of up to 700 per cent since the beginning of the energy crisis.
On 23 March, the Department for Energy Security and Net Zero (DESNZ) hosted a webinar to provide further information about how the scheme will work. CIH’s policy and practice officer Matthew Scott attended the webinar to provide a summary to our members who support with heat network customers, or who work with heat networks as part of their role.
What does the scheme look like?
The Energy Bills Discount Scheme (EBDS) will provide heat network customers with a higher rate of energy bill support from 1 April, covering the period from 1 April 2023 to 31 March 2024. The target rate contracts will be subsidised to £78.30/MWh for gas and £340/MWh for electricity, and the indicative timeline presented by DESNZ is as follows:
Eligible heat network suppliers with domestic customers will be required to apply for higher EBDS support through an online portal, which will open at the beginning of April. DESNZ intends for successful applicants to be provided with an eligibility certificate, which will be supplied to both the heat supplier and the energy supplier. This will enable energy suppliers to identify which heat networks will need to receive the higher EBDS rate and support heat suppliers to pass the discount on to customers.
The application and registration process
The application process for heat supplies will work as follows:
Every eligible heat network will require its own application to be made by a heat supplier. To complete an application, DESNZ will require:
This will enable DESNZ to match a heat network to its existing database. If this does not work, applicants will be asked for additional proof of eligibility (e.g. residential agreement, domestic heat supply contract).
Pass through requirements
DESNZ expects the pass through requirements to be similar to the Energy Bill Relief Scheme, the previous mechanism for providing support to heat network customers. Heat suppliers will need to inform their customers how much benefit they received and how it will be passed through within 30 days of receiving support.
Once registered and verified as eligible, DESNZ will also issue additional guidance and resources that will help heat suppliers communicate the details of the pass through to their customers.
Complaints and enforcement
DESNZ have noted that if customers do not feel that the support has been passed through in a satisfactory manner by their heat supplier, they should contact their heat supplier to raise their concerns in the first instance.
Customers in Great Britain will be able to raise a compliant with the Energy Ombudsman if their issue is not satisfactorily resolved. Customers in Northern Ireland will be able to do the same to the Consumer Council for Northern Ireland (CCNI). Heat suppliers will not face case fees for complaints that are investigated.
Further details about the EBDS and its applicability to heat network customers are expected in due course, and some more information about the EBDS can be found here.